W?ith the wealth of the rich increasing and the growing focus on celebrity status within society, the boundary between private and public lives has become blurred. In this climate, safety and security have become a major concern for wealthy clients and their insurers.
Many insurers working in the high net worth (HNW) market now offer a technical advice service to clients to help them decide on effective security systems, taking into account their circumstances and personal requirements.
But how many of these services go beyond glorified call centres to genuinely offer a personalised service to discerning clients? And does this really matter? How important is security for high net worth insurers?
Lee Chapman, senior client manager at Zurich Private Clients, the HNW operation of Zurich Financial, says his company believes in a truly personal service.
“We have a team of 10 staff who are always out on the road visiting clients because we believe that visiting the premises and giving first-hand security advice really makes a difference,” he says.
Chapman says paying personal visits to properties of high net worth individuals – in Zurich’s case people with house contents insured for a minimum of £100,000 – allows the company’s staff to give bespoke advice. “Getting the amount of cover right is particularly relevant to high net worth people with a lot of jewellery or fine art, or collectibles,” he says. ‘ ‘ “Our advisers can make sure that they have enough cover for what they need.
“We can also advise on physical security matters such as whether they have good enough door and window locks, window alarms, security gates, access control and audio and CCTV security systems.
“A lot of clients now like to put alarm systems in their grounds to deter would-be thieves from coming near.
“If these systems are linked to security centres, security personnel can confront intruders over a microphone system as soon as they see them.”
As many HNW clients own overseas properties in continental Europe, Zurich allows them to put them all on the same policy. Unless the property is a smallish apartment, the insurer is also happy to send its security advisers overseas to help clients with security advice.
Chapman says a particular growth area of crime in Europe is aggravated thefts where people are personally assaulted and robbed of valuables.
Zurich offers HNW clients access to specialist consultants who can advise if they think they are being stalked or need personal guarding. It can also put them in touch with experts on kidnap resolution.
“These are the sorts of things you don’t get from a standard policy,” Chapman says. “We think this is where we can make a difference.”
Zurich’s effort to distinguish its HNW cover for ordinary household insurance is backed up by the company’s estimate that Britain’s £300m-£350m HNW insurance market only actually covers 25% of those individuals who are eligible for it.
The remainder either self-insure or take out ordinary cover.
John Lawton, director of Allianz Insurance’s home and legacy HNW offering, agrees that the issue of security for the HNW customer is of increasing importance and frequently goes beyond the usual concern for physical and electronic security, to a need for personal security and the protection of physical assets.
“‘The disturbing trend in recent years has been for more burglaries to happen at night when people are in their homes, with burglars relying on the likelihood that the alarm will not be set’
John Lawton, Allianz
“The disturbing trend in recent years has been for more burglaries to happen at night when people are in their homes with burglars relying on the likelihood that the alarm will not be set,” he says”
Customer resistance
The situation has not been helped by the fact that there is increasing resistance from customers to the high costs now associated with alarms, which are partly due to the new European Standards for alarm systems and a new Association of Chief Police Officers policy on alarm systems, says Lawton.
“With this background, insurers have an important role to play in providing customers with good risk management advice,” he says.
“Providing risk management advice is a value-add service opportunity that reinforces the whole service proposition that is so important in this HNW sector.
“Home and Legacy has provided risk management services to clients in association with home insurance products for several years and increasingly clients are finding this a valuable service to ensure that their homes and families are kept safe.”
Ted Kenrick, technical services manager at Norwich Union Risk Services, says HNW clients often need advice on issues as to where to put the safe in their property.
“Some customers have a lot of valuable jewellery and a safe to put it in, but with safes it is really important to put them in the right place,” he says.
“We also offer a risk helpline and website with advice. We think this is very important for HNW customers because the thing that concerns them most is their security.
“They have invested in their property and want to make sure they have the right level of protection around it, so they want an insurance company that will deliver that.
“As the largest company in UK household insurance, we can deliver that and also put them in touch with specialist suppliers who can help them.”
Tim Bell, personal lines team leader at Manchester-based broker Caunce O’Hara, says that with HNW insurance, the details and extra effort insurers go to can pay off.
Client’s decision
“As with any HNW insurance, the client’s decision will be based in part on the price, in part on the cover and finally on the ‘bells and whistles’ that are included,” he says.
“Surveys are certainly an important part of HNW business. They give the client and broker, and insurer for that matter, confidence that the cover is adequate and meets any relevant exceptional requirements, in comparison with others in their social and financial peer group.
“It would be helpful if more research on security matters was included as part of future surveys. Brokers would then feel in a better position to advise.”
